Bowman Consulting Group Ltd.

That was the last full year prior to our IPO was 103 million. This is an exciting time for us as we continue to advance toward our frequently discussed goal of reaching $500 million in gross revenue annual run rate within our first five years as a public company. The continuing strength of our markets across all divisions and services resulted in healthy year-over-year growth of net service billings and adjusted EBITDA during the quarter. Interest rates came down for the first time in nearly five years, which re-energized the building infrastructure market. And as we'd hoped would be the case, several large transportation awards that we had been waiting on finally got underway late in the quarter. In July, we effected a change in leadership within operations. We promoted Dan Swayze to the role of chief operating officer, and he's hit the ground running. We expected Mike Brillin to settle into the newly independent position of president, engaging him in oversight of non-day-to-day operations and strategy of the company. Once in the role, however, Mike decided it was not what he wanted, and he elected to retire from Bowman after nearly 30 years with the company. In the interest of both clarity of leadership and timely reassignment of responsibilities, Mike resigned from both his leadership and governance roles immediately upon announcing his retirement. For now, we do not intend to refill or reassign the position of president. The job of leading day-to-day operations is now squarely in Dan's hands, and I'm extremely pleased. He's been right there alongside Bruce and me during the past couple of months as we've implemented staffing adjustments to better align labor and revenue. These efforts have already started paying dividends, as evidenced by the third quarter results. At the same time, we redoubled our commitment to bottom-up forecasting. I'm confident we will remain diligent about proper alignment of labor, accurately forecasting revenue, and continual improvement of performance. Our markets remain healthy, and sales and new work continues to outpace revenue. Year over year, our backlog grew 27%. Since the end of Q2, backlog increased by $28 million, of which approximately one-third was attributable to backlog acquired during the quarter. with a balance coming from a robust bookings of new work, which resulted in a book-to-burn ratio that was well above 1. Okay, with that, I'm going to turn the call over to Bruce to discuss the financial results. Bruce?

Thanks, Gary. Well, it certainly was an all-hands-on-deck effort during the quarter to refocus and realign our operations to deliver the solid results we released last night. As a quick reminder to everyone, we refer to net service billing and net revenue interchangeably. Net revenue is an industry standard non-GAAP metric that represents the revenue generated by our workforce by eliminating pass-through project expenses from gross revenue. So I'll start with revenue on slide four. Gross revenue in the third quarter was up 21% year-over-year at $113.9 million, with net revenue up 23% to $101 million. Year to date, we've generated $313 million of gross revenue and $281 million of net revenue, which represents year-over-year increases of 24% and 26%, respectively. During the quarter, we implemented targeted staffing adjustments throughout the company to better align our labor with current and forecast revenue. Our gross margin for the quarter, without giving effect to any of these labor adjustments, was 52.4% as compared to 51.6% in the third quarter last year. Year-to-date gross margins has been 51.9% as compared to 51% this time last year. On a sequential basis, as compared to Q2 this year, SG&A was down 140 basis points as a percent of gross revenue at 45.6%. While this is not a destination, it is meaningful progress in our efforts to leverage economies of scale as we grow. On slide five, you'll see the non-cash stock compensation in the quarter was $6.5 million compared to $7.2 million last year. Year-to-date non-cash stock compensation expense is $20.4 million, which includes roughly $1.4 million of expense related to our employee stock purchase plan. We're still projecting roughly $26 million in total stock compensation expense for 2024, which would be 67% of net revenue. Looking ahead, we expect that percentage to drop to around 5% in 2025 and settle in around the 3% to 4% range thereafter. Adjusted EBITDA for the quarter increased $1.9 million from last year to just under $17 million, or a 16.7% margin on net revenue. Adjusted EBITDA this quarter included roughly $1.6 million of one-time costs related to the restructuring of labor during the quarter. We believe labor adjustments are now behind us. For the nine months ended September 30th, adjusted EBITDA increased $6.7 million over last year to $42.5 million, which was a 15.1% margin on net revenue. We still believe we can achieve a sustained high-teens margin at scale with optimized labor. Before I talk about revenue in detail, I'll quickly point out a small change in our presentation of the gross revenue by market table. Based on comments we've received relating to the consistency of presentation between current and prior period filings, we're no longer modifying the reported acquired revenue from prior periods. To calculate organic growth, however, we remain consistent in our methodology of considering revenue from acquired companies to be part of the organic base of revenue after four quarters. As detailed in the press release in slide six, 49% of gross revenue for the quarter was from building infrastructure, 19% from transportation, 18% from power and utilities, and 14% from emerging markets. which includes imaging and mapping, water resources, mining, and environmental services. As compared to last year, building infrastructure is down 550 basis points as a percentage of gross revenue, or nearly 10%, with emerging markets increasing nearly 800 basis points, or more than doubling. This is in large part due to the acquisition of Surdex, but it's also from other gains in water and environmental services. The distribution of net revenue by vertical was roughly the same. During the third quarter, gross revenue from acquired companies was $23.3 million, and net revenue was $20.4 million, or roughly 20% of gross and net revenue. This quarter, acquisition revenue included Excellence, Dennis, CFA, Blankenship, High Mesa, S. Roundtree, TCE, Moore, Spieth Lewis, Certix, Element, Roballon FCS. At year end, acquisitions we made in Q4 of 2023, meaning excellence through Hess Roundtree, will fall off the acquired revenue list. Turning to slide seven, on a trailing four-quarter basis, organic growth of net revenue at the end of the third quarter was approximately 8.3% as compared to total net revenue for the trailing four quarters at the end of the third quarter last year, during which all net revenue was included in the organic basis. Mike Nygren, Organic growth of net revenue during that period was most significant in emerging markets at 63% with transportation next at 17% followed by power utilities at 14% and building infrastructure at 1%. Mike Nygren, Nominally transportation was the largest contributor, followed by power and utilities emerging markets and building infrastructure. Mike Nygren, This trailing four quarters view of organic growth is a little different than we've presented in the past. Given the volatility created by the inconsistent timing and frequency of acquisitions between quarters, we feel this presentation of trailing four-quarter growth offers a better perspective for understanding growth trends. For the nine months ended September 30, gross revenue from acquired companies was $49.8 million, and net revenue was $45.1 million, or roughly 16% of both gross and net revenue. Organic growth of net revenue for the nine months was approximately 5.6%, as compared to the same nine-month period last year, where all net revenue was likewise considered organic. Again, the largest percentage growth was emerging markets at 48%, followed by transportation at 14%, power utilities at 6.2%, and building infrastructure at just under 1%. Again, transportation contributed the largest nominal growth. We believe that organic growth from building infrastructure will continue to rebound into 2025, while growth from emerging markets will moderate a little bit now that the starting basis is higher. Turning to slide eight, our balance sheet is as healthy as it's been, with roughly 12 million of cash on hand, low leverage, and plenty of capital available. Our line of credit is close to $70 million available, and our equipment financing capacity is sufficient to cover CapEx through 2025. Net debt on September 30 was roughly $85 million, which represents a leverage ratio of 1.6 times trailing four quarters adjusted EBITDA and approximately 1.2 times forward four quarters of adjusted EBITDA. Cash flow from operations for the nine months was up $5.5 million sequentially from June 30 at the $11 million, with $44 million year-to-date cash flow from operations before a $33 million use of cash from changes in working capital. With respect to cash and liquidity, interestingly, in October we found ourselves unexpectedly back in the position of having the opportunity to file our 2023 returns in accordance with the R&D position we'd adopted for our 22 returns. As it turned out, definitive guidance the IRS was expected to have released prior to October had not been issued as we approached filing our returns. This allowed our tax advisors and us at Pricewaterhouse to reach a reasonable basis position for continued R&D expense deductibility enabled us to file without remitting the approximately $12 million payment we expected to make and without accruing for penalties. So that $12 million will stay with us for now. And since the filing was deemed to be a reportable subsequent event, you will see further disclosure about the return of the UTP and the 10-Q. During the quarter, We used our capital to buy back just about 500,000 shares of common stock under our $25 million authorization at an average price of approximately $23.89 per share. This does not include shares of Treasury stock purchased to cover taxes associated with stock vesting. On September 30th, we had 17.7 million shares outstanding. We've continued to repurchase shares under the authorization since the end of the quarter, And as of today, we have approximately 17.5 million shares outstanding. You'll see on slide nine that at the end of the quarter, we had gross backlog of 380 million, which is $81 million more than the end of Q3 2023, and as Gary said, over 28 million more than June 30th. While approximately 10 million of the sequential increase over the last quarter was a result of acquired backlog, the balance was derived from new orders. The distribution of backlog is slightly overweighted to transportation relative to revenue in the third quarter. Given the nature of our sales cycle and the generally longer-term nature of transportation projects, I would not read much into that mismatch. Turning to slide 10, in the release yesterday, we increased our 2024 net revenue outlook to accommodate the revenue we'll pick up from the recent ExelTech acquisition and reaffirmed adjusted EBITDA, which would not have breached the rounding threshold if we added it. We also introduced a net revenue outlook for 2025 of $422 to $437 million, which represents organic growth of net revenue between 5 and 9% based on pro forma full-year 2024 net revenue adjusted for partial-year acquisitions as the basis. For our outlook for 2025 adjusted EBITDA, we're projecting a 16 to 17% margin on net revenue with a range of $68 to $75 million. As always, that excludes future acquisitions not closed as of today. As evidenced by the more than 30% reduction to our equity value in response to last quarter's roughly 4% reduction to revenue guidance and roughly 8% reduction to adjusted EBITDA guidance, the message is clear that there's no benefit to stretching with respect to 2025 guidance at this time. As such, we will revisit our outlook in connection with our quarterly and year-end reports throughout 2025. We're hopeful that this quarter demonstrates to the market that Bowman is not damaged and our equity is meaningfully undervalued at current multiples as compared to our peers and other comparable transactions we see in the marketplace for firms our size. Before I go, I'll quickly mention that I'll be at the Bayer Conference in Chicago next week, the Craig Hallam Conference in New York, and others throughout the remainder of the year and into next year. Check our investor website to see a calendar of where we'll be presenting and meeting investors in person. Gary?

Okay, thank you, Bruce. Last week, we announced the acquisition of Washington State-based Exel Tech Consulting. It's a well-established 35-year-old engineering, design, and program management firm. They have extensive bridge design, structural engineering, transportation planning, and environmental sciences capabilities. Geographically, this acquisition complements our July acquisition of Washington-based FCS Group. which is a professional services firm focused on rate and financial consulting for the utility and renewable energy industries. The acquisition of ExelTech fits right into our strategic objectives by fueling the growth of our national transportation practice and expanding the breadth of associated offerings. The fact that ExelTech and FCS are in close proximity to each other provides Bowman with an immediate combination of regional expertise, established customer relationships, and expansion of our operational footprint to the Pacific Northwest and beyond. From a macro perspective, the first Fed rate cut in several years has energized real estate markets. However, uncertainty around the pace of future rate cuts and the landscape of regulatory and economic policy is having a sort of paralyzing effect on this market. Good news for us. David Miller- Is a planning and engineering and the first steps and preparing for project starts and restarts and we see a notable uptick in market activity and real estate related markets, particularly in multifamily markets such as bill for rent and apartments. David Miller- Okay, turning to slide 11 David Miller- Several of the transportation award starts that were delayed over the first part of the year finally got underway in the latter part of the third quarter. David Miller- Notable among these is the Illinois David Stahlman- Do ti 55 corridor rehabilitation project where we're providing multi year management and design services for a 16 mile section of the highway. David Stahlman- Others included design build project for the Virginia dot and a comprehensive roadway improvement project for us right one in Philadelphia. David Stahlman- Large third quarter transportation wins now making their way through contracting include a $10 million award with Cook County, Illinois. And furthermore, we fully expect activity relating to the Allegheny Tunnel bypass project for the Pennsylvania Turnpike Authority to increase through the end of the year. In our developing ports and harbors practice, which we now group with transportation, we were awarded several million dollars in contracts to be delivered in 2025 from both longstanding and new customers. Our new port asset conditions kit is an innovative proprietary delivery platform that we've developed for marine facility operators We've got high hopes for its prospects moving forward. Coastal and resiliency engineering combined with high altitude aerial surveying has enhanced our ability to pursue public and private sector customers in the aftermath of ever more frequent and ferocious natural disasters. Another aspect of our ports and harbors expansion includes enhanced waterfront capabilities, which have been leveraged by our traditional development practice leaders to pursue urban waterfront redevelopment and coastal shore protection opportunities in areas including Kentucky, South Carolina, and Maine. Also, we're expanding our focus to inland recreational marinas and boating facilities in areas such as Pittsburgh, Charleston, Savannah, Philadelphia, Houston, and others. On other fronts, we recently contracted to immediately start work at the Charlotte Douglas International Airport in Charlotte, North Carolina. The scope of this work includes comprehensive survey services for a new 10,000-foot runway. Additionally, we rewarded our fifth ongoing on-call agreement with Southwest Gas, expanding our service area into western and northern Nevada and California. Revenue in our MEP group is trending upwards with strength in commissioning services, and in the power markets, we're seeing an uptick in electrification and decarbonization assessments as the industry moves more toward net zero and all-electric solutions. Acquisitions continue to have a positive long and short-term impact on the organic growth of the business. A notable example is our growing fire protection engineering practice, which came from the Fisher acquisition. Our contract for surveying hazardous material storage facilities for Marine Corps bases in the US and Japan was recently expanded by an additional 21 sites. Over the course of our nearly 30 years in business, organic growth has always been a central focus of our approach to growth and expansion. Our long-term track record of a robust organic growth is a result of culture, attitude, risk tolerance, and an eye for good markets. These attributes can characterize us still today. Our recent inclusion as an ENR top 150 global design firm puts us in good company among industry elites and works to solidify our brand as a premier provider of comprehensive engineering and design solutions. Going into 2025, I expect that we'll continue to be acquisitive likely with larger average revenue size and a bit less frequent than we've been over the past several years. We'll continue to focus on adjacent businesses and attractive markets that we can readily integrate and grow significantly over time. While private equity continues to play an ever more active role in the industry, paying outsized multiples for larger firms, we're confident that our culture and approach will continue to make us competitive and successful in our M&A activities. Our strategy is working. Clearly, we stumbled last quarter in terms of forecasting, but we've recovered our firm footing and are poised to deliver on our commitments during the remainder of the year and into 2025. Our efforts toward diversification, integration, leadership transition, and process excellence have positioned us to grow organically, expand our services, make acquisitions that broaden our footprint while deepening our customer relationships and wallet share, and most importantly, deliver long-term profitability cash flow conversion, and value creation for our shareholders. With that, I'll now turn the call back to the operator for questions and answers.